Good morning. Regulators in Europe are forcing companies—including U.S.-based corporations that operate abroad—to bring news of their network intrusions out into the open.

A European Union directive proposed Thursday governing network and information security would require companies to disclose significant cyberattacks to national authorities, CIO Journal’s Rachael King reports. The directive would broadly impact consumer-facing companies that do business online, including multinational banks, as well as stock exchanges, energy firms, transportation providers and health-care companies.

The new regulation is “a commanding directive — it’s certainly not voluntary,” said Benjamin Powell, partner at the law firm Wilmer Cutler Pickering Hale and Dorr LLP. The policy discussion in the U.S. has tended to focus on critical infrastructure services, as does the EU directive. Yet, the EU widened the net to include key Internet companies. Online travel services may need to report an attack that prevents users from booking travel arrangements. Vendors providing companies with cloud services would likewise be required to report hacks that prevent users from accessing their content.

Social software for corporations is going nowhere. Eighty percent of enterprise social software efforts will fail by 2016, partially because senior leaders will never use it, Garter Inc. analyst Carol Rozwell. This lack of participation at the top presents a roadblock to broader adoption, CIO Journal’s Clint Boulton writes. Leaders must also provide employees with a compelling business reason to use social software, such as an improved customer experience or better connections with clients or prospective employees.“If the work is not something I’m committed to doing because I’m enthusiastic about it, then I won’t use [the social software],” she said.

TECHNOLOGY NEWS

Reappearing on YouTube: Illegal movie uploads. Hundreds of full-length feature films including movies from Walt Disney Co. and Sony Corp.‘s Columbia and Tristar studios have been illegally uploaded to Google Inc.’s YouTube. Why the movie studios didn’t block the films by using a special YouTube program—called Content ID—for identifying their copyrighted content is a mystery, writes the WSJ’s Amir Efrati. On Thursday, after inquiries by The Wall Street Journal, Disney used Content ID to successfully block some of the classic animated films that have been on YouTube for as long as a year, including “Peter Pan,” “Snow White and the Seven Dwarfs,” and “Fantasia.” The return of the problem shows how piracy continues to pop up for YouTube, even after it took steps to eradicate the issue and the problem had lain largely dormant over the past five years.

H-P tells suppliers in China to limit student labor.Hewlett-Packard Co. is imposing new limits on the employment of students and temporary agency workers at factories across China, the NYT’s Keith Bradsher and David Barboza report. The move, following recent efforts by Apple Inc. to increase scrutiny of student workers, reflects a significant shift in how electronics companies view problematic labor practices in China. H-P’s rules, given to suppliers in China on Friday morning, say that all work must be voluntary, and that students and temporary workers must be free “to leave work at any time upon reasonable notice without negative repercussions, and they must have access to reliable and reprisal-free grievance mechanisms,” according to the company. The rules also require that student work “must complement the primary area of study” — a restriction that could rule out huge numbers of students whose studies have nothing to do with electronics or manufacturing.

LinkedIn’s profit soars. LinkedIn Corp.‘s profit and sales jumped sharply in the fourth quarter, as the professional social network siphoned more dollars from corporate recruiters and expanded its membership, the WSJ’s Evelyn M. Rusli reports. The company, which went public less than two years ago, said net income rose 66% on an 81% increase in revenue. Its results handily beat Wall Street estimates, sending its shares up nearly 10% to $136.30 in after-hours trading Thursday.

Facebook glitch disrupts Web. Major websites were briefly taken down Thursday by an error that stemmed from Facebook Inc., as Internet mainstays like MSNBC.com, CNN, Yelp and New York Magazine all sent users to redirect pages almost immediately upon loading, reports AllThingsD’s Mike Isaac. Upon visiting the sites, users were redirected to an error page inside of the Facebook website, which seems to suggest that the error lies in Facebook Connect, the software platform that snakes Facebook’s reach throughout the entire backbone of the Internet. Connect is seen on many third-party-publisher websites in the form of the “Like” button — especially BuzzFeed, the viral news site which relies primarily on social media to spread throughout the Web. A Facebook spokesperson said there was a bug “that redirected people logging in with Facebook from third-party sites to Facebook.com.” But the issue was quickly resolved. Still, it’s an unpleasant reminder that many of the most popular sites on the Web can be felled by something as faulty as a “bug” in Facebook’s code.

Court to consider software patents. A federal appeals court in Washington, D.C., will hear arguments Friday over a fundamental question that has vexed the technology industry for nearly two decades: When is a piece of software patentable? The issue has created a curious split in the technology sector. On one side lie technology giants such as Google, Facebook and Intuit Inc. which largely believe the Patent & Trademark Office has issued too many software patents in recent years and would like to see courts apply a more exacting standard when reviewing them, writes the WSJ’s Ashby Jones. On the other lies a collection of big and small technology companies and patent holders, including International Business Machines Corp., which contend that tighter standards on software patents could hinder innovation. “It’s a huge case for the patent-law community,” said Matthew Moore, a patent lawyer at Latham & Watkins LLP in Washington, D.C., who isn’t involved in the case. “Because we’re talking about software, the decision could affect an enormous number of companies.”

RIM names two to the board. Smartphone maker Research in Motion Ltd. said Thursday it has named two telecom industry executives as directors, raising its board size to 12 members. The additions are Richard Lynch, retired executive vice president of Verizon Communications Inc. and Bert Nordberg, former chief executive of Sony Ericsson Mobile Communications, reports the WSJ’s Will Connors. The additions are the latest in a company overhaul that began last year when co-chief executives Jim Balsille and Mike Lazaridis stepped down.

Einhorn protests Apple proposal to eliminate preferred stock. Greenlight Capital Inc.‘s David Einhorn urged Appleshareholders to vote against a proposal to eliminate preferred stock from the company charter. Mr. Einhorn, a hedge fund manager whose firm has owned Apple shares since 2010, said he has been in talks with Apple on the creation of a preferred stock that would be distributed at no cost to Apple’s shareholders and would provide a sustainable dividend, the WSJ’s Ben Fox Rubin reports. Apple has accumulated a massive cash stockpile as its gadgets continue to deliver strong profits. For the quarter ended Dec. 29, Apple reported $137.1 billion in cash, short-terms securities and long-term securities.

Mobile data costs, BYOD major concerns for IT managers. A survey of almost 500 IT executives reveals mounting frustration with both rising mobility costs and the complexities of BYOD, eWeek’s Nathan Eddy reports. Fifty-seven percent of participants in the iPass and MobileIron 2013 Mobile Enterprise report expected mobile data roaming costs to rise in 2013. The results reflected a growing trend of IT departments losing control of mobility budgets as other departments assume responsibility. “IT managers are challenged to safeguard corporate data and keep roaming costs low. And when mobility budgets are managed by departments rather than IT, data roaming costs can be hard to control,” iPass CTO Barbara Nelson said in a statement.

Europe wants socialized Internet, courtesy of Google. Google last week agreed to pay $80 million to a fund to help French media companies develop their Internet presence. The agreement ended demands by French publishers that Google pay licensing fees for using headlines and article snippets in its search engine results. Now the head of the European Publishers Council wants the search giant to pay media companies across Europe. “Search engines get more than 90% of revenues from online advertising and a substantial part of these come directly or indirectly from the free access to professional news or entertainment content produced by the media,” Francisco Pinto Balsemao told Reuters.

BlackBerry: Not big in Japan. Research in Motion will stop selling its smartphones in Japan because of costs associated with modifying the BlackBerry 10 OS to be compatible with the Japanese language, Reuters reports. BlackBerry market share in Japan has shrunk from 5% to 0.3%.

Facebook deletes facial recognition database of EU users. European regulators say Facebook has deleted all facial recognition data relating to Facebook users in Europe, reports IDG’s Loek Essers. The action has led a German data protection agency, which helped lead Europe’s protest against Facebook’s facial recognition database last year, to drop proceedings against Facebook. Meanwhile, back in the U.S. Facebook re-enabled photo tag suggestions for U.S. users. The service was temporarily suspended last year. Explaining its action, Facebook said the feature would help user users to “easily identify a friend in a photo and share that content with them.”

Silicon Valley new hires echo dot-com boom years. The tech-heavy San Francisco Bay Area added 92,000 jobs last year, a level Oakland Tribune’s George Avalos compares to the hiring frenzy that marked the dot-com boom. New this time around is the growing prominence of the city of San Francisco, home to Twitter and Salesforce.com Inc., as a tech hub.

Android=Samsung. Eight of the top 10 Android devices were built by Samsung Electronics Co., according to data compiled by mobile analytics firm Localytics. Overall, Samsung controls 47% of the total ecosystem. “Samsung is taking all the market share and profits while would-be competitors like HTC Corp., LG Corp. and Motorola Mobility LLC battle for scraps,” says ReadWrite’s Dan Rowinski. Samsung’s dominance could lead competitors, as well as non-Android firms like BlackBerry and Nokia, to a breaking point, he says.

Enterprise software is so cool. With enterprise startups like Box, Cloudera Inc. and Zendesk finding recognition and a modicum of fame, Silicon Valley is changing, says ReadWrite’s Matt Asay. “Silicon Valley, which for years has engrossed itself in mindless startups with silly names and sillier business plans, is getting serious again. Serious about revenue. Serious about profit. Serious about the enterprise. It’s about time,” he writes. Virtual high-five to Mr. Asay.

WHAT YOUR CEO IS READINGEvery week, CIO Journal offers a glimpse into the mind of the CEO, whose view of technology is shaped by stories in management journals, general interest magazines and, of course, in-flight publications.

EBay is back. Credit for eBay thriving as a “full-service e-commerce operation” belongs to CEO John Donahoe, says Fortune’s JP Mangalindan. Hired from Bain & Co. in 2005 to run eBay’s Marketplaces business, Mr. Donahoe quickly realized that a reliance on auctions was setting up the Internet e-commerce pioneer for failure. “What I found was a company being disrupted around the edges,” he tells Mangalindan. Replacing Meg Whitman as CEO in 2009, Donahoe cut costs and employees, rebuilding the company around its PayPal payment platform, mobile e-commerce and key acquisitions that helped make eBay a leader in the use of retail analytics. Today, customers can use PayPal in brick and mortar stores, while collectors of Star Wars figurines can still find what they are looking for in a revamped, online marketplace. Venture capitalist and eBay board member Marc Andreessen has the highest praise. “If Steve Jobs or Mark Zuckerberg are the templates for the founder CEO, then I think John has become the template for the professional CEO.”

Confessions of a corporate spy. George Chidi, whose business is competitive intelligence, explains some of his tricks to Inc. magazine readers. “This kind of social engineering is like hacking people, seeking a weak point for entry.” Beyond seeking out company representatives likely blurt to out, say, last month’s sales figures, Chidi scours LinkedIn for employee movements and salary information, researches court records and trades business cards on the website Jigsaw—recently purchased by Salesforce.com. “The information I secure is given freely and obtained legally,” he explains. Out of a sense of guilt, perhaps, Chidi provides some simple steps on what companies can do to thwart corporate espionage. Companies should do a deep cleanse of their websites and blogs for any confidential data. A company policy on how to use social networks will provide employees a framework of what to tweet. Most important is how companies treat employees. “Human factors are always the weakest link in a security system,” he explains, “People who feel mistreated by their employer tend to be more willing to discuss that employer’s shortcomings.”

Big Data is watching you, in-flight magazine warns.Hemispheres, the in-flight magazine for United Airlines, tackles something called ‘Big Data.’ Heard of it? Big Data’s origins, according to the article, have something to do with “a new generation of supercomputers that operate at unimaginable speeds.” The benefits of using Big Data are “beyond human comprehension,” extending from “suggesting the perfect birthday gift for your Great-Aunt Dora” to tracing the migratory patterns of “endangered aquatic species.” One day, author Boyd Farrow adds, Big Data might find a cure for cancer. Of course there is the potential for abuse, with privacy likely to go the way of those endangered aquatic species. But if Big Data really can suggest a present for Great-Aunt Dora, then consider any such worries moot.

EVERYTHING ELSE YOU NEED TO KNOW

CFOs plan tech investments. Corporate finance executives in the U.S. expect to increase capital expenditures in 2013, particularly in technology, as growing cash balances and a positive outlook for their businesses pave the way for reinvestment, according to a survey by TD Bank. Among the 303 U.S. CFOs, comptrollers, treasurers and directors of finance in the survey, 66% said they have at least a modest stockpile of cash on hand, and 26% said they are prepared to tap into that money this year. At the same time, 71% expect sales to increase, compared to only 15% that foresee a drop, James Willhite notes. The biggest anticipated target for reinvestment is technology, with 54% expecting to spend more in that area. Improvements to existing facilities were cited by 34%, and 26% said they would increase spending on hiring. Just 13% expected to increase capex on expansion via M&A.

Cash provision in Dell deal ‘unique.’ The FT reports on an unusual provision that requires Dell and its subsidiaries to liquidate cash equivalents and marketable securities in its deal to go private (substantially all of which, Dell notes, are held with overseas cash, which raises the specter of repatriation taxes). That’s to ensure Dell has at least $7.4 billion, and up to $8.1 billion, in cash on hand at the deal’s closing.

Al Browne, a partner with law firm Cooley LLP who specializes in M&A, tells CFOJ that such provisions in private-equity backed deals aren’t “completely uncommon,” but “on a scale of this magnitude unique.” The purpose of the clause is to support, or backstop, the portion of the deal that will be financed with Dell’s existing cash, which we told you in Thursday’s Ledger should work out to $3 billion or so. Mr. Browne said it’s “impossible” to know the exact significance of the $7.4 billion to $8.1 billion range, but he said he suspects we’ll find out more in the “sources and uses” discussion in the forthcoming deal prospectus. One possibility includes Silver Lake funding some or all of its $1.4 billion equity contribution using Dell’s cash on hand, he said.

Economists expect more tepid growth this year. Economists are forecasting the same steady, growth for U.S. GDP this year that they were expecting in 2012 – 2.4%. Last year’s predictions proved too optimistic, but they say this year the economic fundamentals are sturdier, reports the WSJ’s Phil Izzo. “We’re definitely in a better place now than at this time last year,” said Arun Raha of Eaton. Mr. Raha cited gains in auto sales and the housing market as pent-up demand is unleashed. And he thinks trade should help growth this year as China’s economy improves and Europe inches out of recession. “The best you can say about Europe is that it’s not going to get any worse,” he said.

EU leaders near budget deal. EU leaders are on the brink of a €960 billion budget deal after an all-night bargaining session in Brussels. Fiscal hawks, including the U.K. and Germany, appeared to prevail over those member states seeking more spending, the FT reports. If approved, the budget, which covers the seven-year period from 2014 to 2020, would be about 3% less than the current long-term budget and represent the first ever decline in EU spending. It would be a sharp cut from the €1.033 trillion budget proposed by the European Commission. And Martin Schulz, president of the European parliament, said his institution might yet reject it.

Tom Loftus contributed to this article.

Correction: An earlier version of this post misspelled the name of eBay Inc. CEO John Donahoe.

Deloitte Touche Tohmatsu Limited's fourth annual Millennial Survey reveals the business activities and outcomes members of Generation Y would prioritize if they held leadership positions. In highlighting millennials' priorities, the survey results draw attention to this generation's values and the themes large enterprises should speak to if they wish to attract and retain members of this rising workforce.